CLAUSE 6.—(Advances by trustee savings banks for development.) (Hansard, 23 January 1947)

§ Mr. Osbert Peake (Leeds, North)

I indicated on the Second Reading of this Bill, that while we had no objections to raise or questions to ask on the first five Clauses, which dealt entirely with the internal machinery and internal arrangements of trustee savings banks, we should like a little more explanation in regard to the power given to trustees of a trustee savings bank under Clause 6. The Clause provides that the trustees of a trustee savings bank may make advances to any persons proposing to form a new trustee savings bank for the purpose of providing for expenses incurred or to be incurred in connection with the formation and the initial working of the new bank. The right hon. Gentleman the Financial Secretary told us, on Second Reading, of the large number of trustee savings banks which at present exist, and the enormous number, of branches which these existing banks maintain. Therefore, it seems to me to require a little explanation why a new power is being taken to enable the trustees of a trustee savings bank to make advances in order to enable a new bank to be established. One would have thought that any possible need for such an institution could have been met by the provision of a branch of one of the existing banks. Perhaps the right hon. Gentleman would give us a short explanation of the inclusion of this new power under Clause 6.

§ Mr. Glenvil Hall

I remember clearly that the right hon. Member for North Leeds (Mr. Peake) raised this question when we were dealing with this Bill on Second Reading, and mat he then indicated that he might raise it again when we reached the next stage of this Bill. The short answer is that savings banks now have power to open new branches—they can do so under the powers already vested in them—but it is felt that, often, the opening of a new branch, particularly when an area is some little distance from the parent office, is hardly the way to deal with the matter, because these savings banks, as indeed is the case with other banks, gain a great deal from local associations. It is felt that, rather than open a branch of an existing savings bank in another town, it would be much better to open a new bank, which would be associated both in name and fact with the locality in which it opened. At the moment it is not possible for one savings bank to lend money for the opening up 420 of another office unless it is definitely part of that same organisation. The amount of money now available for opening new banks is at the moment very small—I think the National Debt Commissioners have about £90,000 in hand—whereas some savings banks have surpluses which they could well lend to assist a new bank opening in another town. Where that is desirable this provision would enable that to be done.